<<I will try to dig out the only published
financial analysis of Vlnc from Red Chip review this
weekend and let you know what their analyst said about margins.>>
You don't need to bother. I've already done this and Red Chip assumed a 14.9% operating margin 5 quarters into production. Note that a 14.9% operating margin would mean that the net profit margin would be less, because operating margin does not include all costs. This compares to my generous assumption of a 15% net profit.
<<So your'take EI&C average and multiply by 3 and that is
generous' is highly unsophisticated and completely
incorrect.>>
Of course it is unsophisticated. However, given that we have absolutely no idea of what VLNC's actual margins will be, I see no point in spending hours developing a more sophisticated model. Once again, taking the industry average profit margin and multiplying by 3X (to account for the VLNC new product factor) seemed generous to me. But feel free to explain to me why you think their margins will be more than 3X the industry average.
<<That does not justify a methodology of taking numbers
which are completely inapplicable, applying an arbitrary
multiplier, and then claiming to have provided insight.>>
I acknowledge it is arbitrary. However, without any way of knowing what VLNC's actual margins will be (and without inside knowledge of what they think their margins will be) any estimate is arbitrary. And once again, my estimate was 3X the industry average and more generous than what Red Chip assumed.
<<Was this an honest mistake or a deliberate attempt to
mislead? Call that question 'ad hominem' if you wish,
but I suggest readers ask themselves who Larry Brubaker
is, why he has continued to post here, what axe he has
to grind, and whether he is a sophisticated investor
out to deceive them or merely a clever sounding knave
with an incredible neurotic need to spend so much time
where he 'has no financial interest'.>>
Yep, completely ad hominem there, IN. |
